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Legalized sports betting in New Jersey has turned out to be a losing proposition now that the U.S. Supreme Court has declined to hear the case.

The court on Monday denied a petition for certiorari that sought review of lower courts’ invalidation of a sports wagering law that promised to be a boon to the state treasury.

New Jersey and numerous amici—three other states, academics and groups seeking to defend federalist principles—fought hard to upend rulings that the law is preempted by the federal Professional and Amateur Sports Protection Act (PASPA).

Monday’s decision is a major victory for the National Collegiate Athletic Association (NCAA) and the four major sports leagues, which vehemently oppose expanding sports wagering.

But senior New Jersey legislators said the court’s ruling would not spell the end of their efforts to bring legalized sports betting to the state.

Sen. Raymond Lesniak, D-Union, introduced legislation Monday that would repeal state laws banning sports wagering at New Jersey casinos and horse racing tracks.

“I expect that the U.S. Justice Department will refrain from intervening, as they have with Colorado and Washington when those states legalized marijuana,” he said.

The bill seizes on the U.S. Solicitor General’s Office’s statement, in its brief to the high court, that PASPA “does not even obligate New Jersey to leave in place the state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPA’s enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part.”

Senate President Stephen Sweeney, D-Gloucester, said lawmakers “will be working with our legal team and advocates to determine the best course of action moving forward. New Jersey has been held hostage by this unfair law and the national sports associations long enough.”

Donald Remy, the NCAA’s chief legal officer, said the association “maintains that the spread of legalized sports wagering is a threat to student-athlete well-being and the integrity of athletic competition. We continue to believe that PASPA is incredibly important, valid, constitutional legislation that has appropriately halted the spread of legalized sports wagering in New Jersey and across the country.”

Matthew McGill of Gibson, Dunn & Crutcher’s Washington, D.C., office, who represented the state along with partner Theodore Olson, did not return a call for comment. Neither did Paul Clement of Bancroft in Washington, D.C., the leagues’ counsel.

Gov. Chris Christie’s office did not respond to an email seeking comment.

The state law, enacted in January 2012 after voters approved a state constitutional amendment, permitted betting on professional and collegiate events that take place outside New Jersey and do not involve a New Jersey team.

The leagues sued one month later, seeking a declaration that the law violated PASPA, which in 1992 barred authorization of sports betting in places where it wasn’t already legal. They also claimed legalized wagering would repel fans and compromise sport integrity.

In February 2013, U.S. District Judge Michael Shipp ruled on summary judgment that PASPA preempted the statute.

New Jersey appealed, arguing that PASPA violates the Tenth Amendment’s anticommandeering doctrine, which bars Congress from making states carry out the will of federal officials. It also alleged that PASPA’s grandfather clause—allowing sports betting to continue in Nevada, Delaware, Oregon and Montana, where it already was legal—is unfair because it favors those states while restricting others. New Jersey had its chance to legalize sports betting before PASPA’s enactment and didn’t.

Last September, a divided panel of the U.S. Court of Appeals for the Third Circuit affirmed Shipp, finding PASPA a valid exercise of Congress’ authority.

At the circuit, Judges Julio Fuentes and Michael Fisher said the anticommandeering doctrine only invalidates federal laws requiring states to take affirmative action. It has been used to overturn federal law just twice by the Supreme Court and never by the Third Circuit, they said. The judges also rejected the state’s equal-sovereignty argument, finding that it didn’t apply to regulation of gambling through the commerce clause.

Judge Thomas Vanaskie dissented in part, saying PASPA violates federalism principles because it restricts regulation of a practice over which the state historically has had authority.

In a petition filed in February, Olson said the Third Circuit’s interpretation of the anticommandeering doctrine is at odds with binding precedent stating that Congress may not interfere with states’ regulatory imprimatur or their conveyance of a “label of legitimacy” on private conduct.

In response, the leagues said New Jersey “attempts to portray PASPA as an impermissible intrusion on state sovereignty are irreconcilable with this court’s cases. Indeed, both of their constitutional arguments depend on wresting language from its context and extending purposefully narrow decisions in ways that would endanger numerous uncontroversial federal statutes,” they said.

The U.S. solicitor general took the leagues’ side, arguing that the circuit ruling “does not conflict with any decision of this court or any other court of appeals.”

Amici came to New Jersey’s aid, citing state sovereignty and other concerns while urging the court to take the case. West Virginia, Wisconsin, Wyoming and three legal scholars argued that PASPA violates constitutional intellectual property rights. There also was a joint brief filed by the libertarian Cato Institute and Pacific Legal Foundation.

Contact the reporter at dgialanella@alm.com.